Decoding Nonprofit Finances: Hiring a Bookkeeper, Collaborating and Key Metrics

Wendy Kidd: 00:00:00

What's different about bookkeeping for a nonprofit

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versus a for-profit business?

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Kelsey Gleason: Okay, so from

our perspective as bookkeepers,

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the biggest difference is that

we're working with boards.

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We're not working with a, a business

owner who has financial, uh, and

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emotional investment in that particular

business and has a goal and objective

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that they're working to obtain with.

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With boards, obviously every

nonprofit is different with

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how that board is structured.

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Board members come and go and as they

come and go, their objectives and

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goals for that organization change.

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And as a result, sometimes our work

has to change to accommodate those

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changing perspectives, ideas, and

goals for the nonprofit organization.

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Wendy Kidd: Welcome to The NonProfit

Nook, the podcast for nonprofit

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leaders, board members, and community

change makers who want to build

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stronger, smarter organizations.

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I'm your host, Wendy Kidd, a longtime

business owner and nonprofit leader.

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And I'm here to bring you real talk,

real tools and real stories to help

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you thrive in the nonprofit world.

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I'll be talking with local nonprofit

leaders, community change makers,

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and experts in everything from board

development to fundraising and digital

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tools, sharing real stories and simple

strategies you can actually use,

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because running a nonprofit is hard,

but you don't have to do it alone.

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Let's get started.

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Today's guest is Kelsey Gleason,

co-owner of Educated Bookkeeping.

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A former high school math teacher

turned into an entrepreneur.

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Kelsey brings her love of numbers and

passion for helping people in the world

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of small business and nonprofit finance.

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Since launching Educated Bookkeeping

in: 2021

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She's built a thriving client list,

including nonprofits like Hugs Cafe.

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Kelsey doesn't just manage the books.

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She teaches business owners and

nonprofit boards how to truly

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understand their financial reports

and use them to make smarter decisions

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all year long, or at least we hope.

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Kelsey Gleason: We hope.

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Wendy Kidd: Welcome Kelsey.

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Thank you,

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Kelsey Gleason: Wendy.

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Wendy Kidd: I appreciate

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Kelsey Gleason: you having me on today.

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Wendy Kidd: Of course.

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I'm so excited to talk about what is most

people think as a boring subject and.

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A nerd subject, but as I

just told a previous podcast

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guest nerd is welcome here.

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So

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Kelsey Gleason: Perfect.

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Then I'm, I'm ready and excited.

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Wendy Kidd: Yay.

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Okay, cool.

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So let's start off with something

that I think most people don't even

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understand, but they know is a thing.

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What's different about bookkeeping for a

nonprofit versus a for-profit business?

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Kelsey Gleason: Okay, so from

our perspective as bookkeepers,

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the biggest difference is that

we're working with boards.

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We're not working with a, a business

owner who has financial, uh, and

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emotional investment in that particular

business and has a goal and objective

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that they're working to obtain with.

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With boards, obviously every

nonprofit is different with

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how that board is structured.

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Board members come and go and as they

come and go, their objectives and

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goals for that organization change.

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And as a result, sometimes our work

has to change to accommodate those

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changing perspectives, ideas, and

goals for the nonprofit organization.

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Wendy Kidd: I can only imagine because

as an event planner I have been through

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that with working with just the bride

or working with the bride and the

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groom and the mom and the other mom

and the other dad and the stepdad.

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And it becomes a board in and of itself,

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Kelsey Gleason: you're managing

a lot of different personalities.

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They all kind of bring their own

agendas and ideas to the table.

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And that can be great for collaboration.

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The group as a whole isn't,

, isn't quite able to assimilate

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that into a single vision.

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It can make juggling that those many

personality dynamics, a little bit more

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challenging than it can be when you're

just working with a single owner of.

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A business.

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Wendy Kidd: Well, and I'm sure you're also

dealing with a lot of board members and or

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staff members that don't even realize what

a financial report is or how to read it.

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So they certainly don't know what

their goal is for reading that

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report and what it should look like.

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So thus the name, I'm

sure, Educated Bookkeeping.

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Yes.

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Kelsey Gleason: A lot of it,

what we do is especially, uh, at

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the onset of a partnership with.

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Either a business or an organization

is first of all sitting down trying

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to understand what their objectives

and goals are, and trying to make

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sure that those reports reflect in

a nice, easy, user friendly way.

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What those goals are.

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Um, and we typically like to sit down with

them, uh, at least a few times during the

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first couple rounds of months and make

sure that what we're presenting them with

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from a financial report standpoint aligns

with the information they they need.

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Often times most of these softwares

come with generic charts of accounts

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that are set up just to hit the

high points, but aren't necessarily

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designed specifically for what that

organization or business needs.

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And so, um, making sure you take the

time to customize those items to really

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reflect the needs of the organization

or business is super important to

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make those reports far more useful.

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Wendy Kidd: Yeah, and we're gonna

talk a little bit more about that in

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a minute, but first I want to ask for

those, those little tiny nonprofits

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who have not hired a bookkeeper.

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They've, they don't have anybody in

house to do it and or they don't have

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an outsourced, what, what can we do?

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What can we talk about to help them?

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What are your recommendations for

those people who are basically dealing

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with the bookkeeping themselves?

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Kelsey Gleason: Right?

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So, always one of those things.

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I think it, it's.

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It can be super challenging.

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Often times it's a volunteer stepping into

that role who may or may not have, uh,

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any kind of background or education in,

business finance or nonprofit accounting.

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And, and they, they just want

to be, helpful and do the best

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job that they can, but we're not

sure necessarily where to go.

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I would encourage.

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I would encourage any board that

is putting this onto a volunteer

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to get them some training.

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Yeah.

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If this is something they really

want to do as a way to help the

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organization, give them the tools

they need to be successful at it.

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Guessing and checking or looking up

on YouTube is, is fine to a certain

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extent, but it's extremely time consuming

and any volunteer needs to be using

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their time in a inefficient manner

to help support that organization.

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Um, so first start with training.

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When it comes to softwares,

there's tons out there.

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I mean, there's tons of free ones

like Wave, um, and there's, uh,

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like FreshBooks and HoneyBook, and,

and popular ones like QuickBooks.

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But regardless of what you're working

with, if you haven't checked out

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something like Tech Soup, where

tons of softwares are available

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at reduced costs to nonprofits.

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I really encourage you to go there.

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QuickBooks is the one accounting software

that they, they offer up, up there.

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And the QuickBooks plus subscription,

which is typically $80 to a hundred

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dollars a month through QuickBooks, you

can get for $80 for the entire year.

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So it's a pretty steep discount for

a software that is going to be with

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the organization for the long term.

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It also offers plenty of other

things like donor management systems

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at significantly reduced costs.

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But, , if you haven't

checked out tech Soup.

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Do that.

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You may find that it has far

more than you can imagine.

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And you know, as a nonprofit, spending

that donor money is super important.

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You want to be fiscally responsible

about it, make good choices, and

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use all the resources available

to you so that you can find.

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Wendy Kidd: Yeah, for sure.

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And we want to just, for those who don't

know what TechSoup is, it is a wonderful,

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wonderful website for nonprofits that

gives them discounts or free software.

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So definitely go there,

definitely check out QuickBooks.

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One of the things that you and I talked

about before also was hiring someone

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to set the software up correctly.

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And I think that goes hand in hand

with the training you mentioned.

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Absolutely.

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'Cause you can absolutely hire a

CPA or a bookkeeper to just do that.

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You don't have to have that monthly bill.

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Correct.

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But you can at least have that first

setup fee of getting that chart of

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accounts like you want it, getting

the software set up and then training

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whoever's going to be inputting things

to be able to use that and to be able to

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pull the reports that they need to pull.

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And, and you also

mentioned quality control.

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Can you talk about that a little bit?

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Yes.

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Kelsey Gleason: So it.

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You know, we're all human.

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Uh, no matter what job we're doing,

none of us are ever gonna be perfect.

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So you've got a volunteer, who is

working on the books, who is presenting

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your financials every single month?

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Who is helping to make sure

that that work is accurate?

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Are you just relying on them to make

sure that what they're presenting

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is a hundred percent the correct

picture moving forward, or are you

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giving them tools, uh, oversight.

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A, a partner that can double check

their work, just so everybody

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feels like what we're getting

out of this is actually true.

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Mm-hmm.

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The financial, health and wellbeing

of organization is a lot of weight

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to put on one person, especially a

volunteer who may not be, a hundred

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percent comfortable with that role.

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And the more support you can give them

to help them be successful, whether

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it is through setting up training or

having somebody review their work.

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It, it's not meant to be

like a, Hey, I got you.

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You know?

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Uh, right.

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You know, this is what you did wrong.

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Wendy Kidd: It's not an ambush thing.

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Yeah.

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Kelsey Gleason: No, it's not.

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It's meant to be just a checks

and balance just to make sure

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that what's happening is actually.

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Um, is actually true in that report.

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Give them, give them the tools they

need to be as successful as possible.

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Wendy Kidd: Absolutely.

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Because you know, your board is

looking at your reports and they're

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looking at, is the money being used

the way it's supposed to be used?

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They're not necessarily looking at, did

we actually spend that much on our gala?

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You know, they, they understand that

that's what the report tells them,

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but they're not drilling down into

the transaction by transaction.

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So you've gotta have somebody

else who's gonna help you balance

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that and make sure it's correct

before the board actually sees it.

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Um, a lot of times I think that's

the treasurer on the board mm-hmm.

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Is that that person who's

gonna double check things.

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Because typically, you know, you've

got your executive director or somebody

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who's functioning as an executive

director, whether it be volunteer or

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not, they're doing that hard labor.

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And then the treasurer

should be backing them up.

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And I think.

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It's really important for the treasurer

and that person to have a good

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relationship, a good feedback circle,

which we have a podcast on that.

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Check out how to do fa feedback, but you

know, have that trusting relationship

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between the two of them so that

they're working as a team, not just as

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somebody trying to catch the other one.

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Kelsey Gleason: Right, right, right.

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Absolutely.

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Perfect.

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Wendy Kidd: So how, you know, when

we start growing, we get bigger

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and, you know, bookkeeping takes

up more and more of our time.

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How do we know when they should go ahead

and hire a professional bookkeeper?

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Kelsey Gleason: So the, the biggest

indicator is you're not getting

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financial reports in a timely manner

to maximize your board meetings.

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Wendy Kidd: Yeah.

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Kelsey Gleason: If you are 2, 3,

4 months out on reports because a

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volunteer that is working on them just

doesn't have the available free time to

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keep up with them on a regular basis.

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That's kind of the waving the white

flag and saying, Hey, maybe this

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is something we need to look at

outsourcing so that we can get good

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information timely so that we can make

good decisions for the organization.

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Um, that's probably the biggest red flag.

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Wendy Kidd: Absolutely.

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And I think that that can come also from

people who are maybe not trained well.

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Mm-hmm.

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And causing a problem with

the financial reports.

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'cause I've definitely been on boards

where the financial reports could not be

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certified because they didn't make sense.

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There were problems with them.

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And if you're constantly having to

go back and do that, you're wasting

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your board members' time as well.

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Right.

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As the staff that's dealing with it.

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So you know, it may be

time to find a new person.

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It may be time to reach out to your

donors and say, Hey, for us to use

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your money effectively, we've got

to pay for a bookkeeper to make

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sure we're doing this correctly.

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Right.

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I think most people would understand that.

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You know?

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Absolutely.

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Transparency is a great thing

when it comes to asking for money,

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Kelsey Gleason:

transparency, communication.

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Absolutely.

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Wendy Kidd: Absolutely.

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So when it's time to find that bookkeeper.

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I know you have opinions on this

and I can't wait to hear them.

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What are some questions to ask?

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What are things to look for in

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finding that bookkeeper?

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Kelsey Gleason: So one of the things, when

we get an inquiry, if the first question

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is always this, how much will it cost?

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I typically know that they, they haven't

really had to look for a bookkeeper or

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worked with bookkeepers, very often.

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Yeah.

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You know, price, I, I know obviously

we care about where our donors

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monies go and we want to make sure

we're spending it responsibly.

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But, uh, as they, as they often say, good

isn't cheap and often cheap isn't good.

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So

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Wendy Kidd: and fast is

in there, I think too.

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Yeah, something, something in that

saying, yes, cheap is not fast, or if

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it's not, if it's fast, it's not good.

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Something like that.

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Yeah.

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Kelsey Gleason: Um.

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So, you know, obviously price is

important, but there are really

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five other things I encourage people

to consider and ask when they're

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interviewing, for bookkeeping help.

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First, how often will the

individual be working in the books?

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A bookkeeper may work weekly, may

work monthly, may work quarterly.

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You need to know how often they're

working in there so that you know

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when to expect things, when you

can expect, uh, timely reports.

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Ideally when somebody is working in your

books weekly, sometimes even daily, they

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see on a regular basis what's going on

in the organization or the business.

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And as a result, can ask more timely,

pertinent questions and be proactive

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about the financial reporting and

making sure that it's accurate.

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Uh, if they work on it once a month,

fine, quarterly, fine, but just make sure

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you're getting that information upfront.

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The other information you want to ask is

who is going to be working in my books?

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You may hire a firm, but I, I mean

there's everything from one person,

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bookkeeping firms to large firms

with 25 staff, some nationally, some

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internationally, some outsource and

subcontract to international firms.

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Yeah, it, all of those are viable

o perations for bookkeeping firms,

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but it's important that you know who

you're going to be working with, who's

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gonna be in there, who will you be

communicating with on a regular basis?

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And if it is a larger firm,

how often should you expect

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turnover in that, in that seat?

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If you're working with an individual

bookkeeper, just a, a individual sole

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proprietor operator, one of the big

questions for them, and even for something

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like a CPA firm is quality control.

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So we talked about that earlier for the

volunteer, that should apply also to

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any, uh, outsourced firm that you, that

you use who is quality controlling the

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work of the bookkeeper, especially if

it's an organization where you're going

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to experience a couple of turnovers

and bookkeepers over the course of

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the year, who is making sure that the

work is consistent, is accurate, and

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in the long term will be g ood for

reporting at the end of the fiscal year.

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Sure.

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So quality control and making sure that

they have some kind of process in place

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to ensure the work is of good quality.

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Wendy Kidd: And this is even for people

who are just one bookkeeper in their

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business, they should have somebody

who's double checking their work.

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Kelsey Gleason: Yes.

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Wendy Kidd: Um, 'cause we all

know, as all small business owners

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have to do, we collaborate with

other small business owners.

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Yes.

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So they should be collaborating

with somebody to check their work.

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Kelsey Gleason: Absolutely.

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Um, and, and again, it's not

supposed to be a a, a gotcha thing

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or to be a critical thing, right?

312

: 00:14:59

It's just solely meant to make sure that.

313

: 00:15:02

W what's presented.

314

: 00:15:04

Support your support.

315

: 00:15:04

I know.

316

: 00:15:04

And what's being presented

is the best product possible.

317

: 00:15:07

Wendy Kidd: If it's your week

to work on that client and

318

: 00:15:08

you're sick, who's gonna do it?

319

: 00:15:10

Right?

320

: 00:15:10

So we, we need to have

backup systems, right?

321

: 00:15:12

Kelsey Gleason: Yeah.

322

: 00:15:13

Um, so after, uh, after quality

control, the next thing to

323

: 00:15:16

ask about is deliverables.

324

: 00:15:18

So, uh, you know, a lot of people

think about end of year as being

325

: 00:15:21

the primary objective for when we

want to make sure reports are done,

326

: 00:15:25

they're accurate and we're good.

327

: 00:15:27

But if you're a, an active board

that is meeting monthly and you can't

328

: 00:15:31

get reports for the previous month,

by the time you have that meeting.

329

: 00:15:35

That's a, that's a concern.

330

: 00:15:37

Then you're always working on data

that is 6, 7, 8 weeks delayed.

331

: 00:15:42

So you want to be able to ask

them, so when are you going to

332

: 00:15:45

officially close each month?

333

: 00:15:47

Mm-hmm.

334

: 00:15:47

Do you have a guaranteed closing date?

335

: 00:15:49

Do you have a guaranteed date

that I will get financial reports?

336

: 00:15:53

Now in our firm, our financial

delivery date is the 15th.

337

: 00:15:57

Now we do have some boards that meet, uh,

on like the second Tuesday of every month.

338

: 00:16:02

Well, sometimes that's

day eight of a month.

339

: 00:16:04

And as a result, we will reshift

our process to accommodate that.

340

: 00:16:10

So that board has the most updated

financials for that meeting.

341

: 00:16:14

It's something you need to really

communicate and ask of whatever

342

: 00:16:18

bookkeeping firm you are, you are, you're

talking to, to make sure that you've

343

: 00:16:22

got those firm deadlines presented.

344

: 00:16:24

Yeah.

345

: 00:16:25

Um, you want to make sure you're

going into it with eyes wide open so

346

: 00:16:27

that you get through the first month

and you're like, okay, I'm ready.

347

: 00:16:30

Can't wait to see these great financials.

348

: 00:16:31

And they're like, oh, it'll

be another two, three weeks.

349

: 00:16:34

Wendy Kidd: Well, and that would

be a red flag for them to look for.

350

: 00:16:36

And a bookkeeper is if the

bookkeeper doesn't ask them upfront.

351

: 00:16:38

Yes.

352

: 00:16:39

When do you need these reports?

353

: 00:16:40

Yes.

354

: 00:16:40

So, yeah.

355

: 00:16:41

Kelsey Gleason: Yeah.

356

: 00:16:42

Uh, and then lastly, just security.

357

: 00:16:44

So do they have a secure portal that will

allow us to share sensitive information?

358

: 00:16:51

If you're accepting, if they're accepting

sensitive documents over email, that would

359

: 00:16:55

kind of be a little bit of a red flag.

360

: 00:16:56

'cause I, I mean, group email is,

is just not, it's not safe, secure.

361

: 00:17:00

Yeah.

362

: 00:17:01

So we should all know this.

363

: 00:17:02

Wendy Kidd: Our emails get hacked all

the time and unfortunately there's so

364

: 00:17:05

much part of information on our emails.

365

: 00:17:07

Kelsey Gleason: Yes.

366

: 00:17:07

So, yeah.

367

: 00:17:08

So if they are that flippant about

receiving sensitive documents.

368

: 00:17:12

Before you've even hired them, how

is that, how are they gonna treat

369

: 00:17:15

that sensitive information long term?

370

: 00:17:17

Yeah.

371

: 00:17:17

So you want to ask about what kind

of security systems they have in

372

: 00:17:20

place to receive that sec sensitive

documentation, and the care

373

: 00:17:24

that they're treating that with.

374

: 00:17:25

Yeah, just again, another protective

measure for your organization.

375

: 00:17:28

So those are really the five things

outside of price you should consider

376

: 00:17:32

when looking for a new bookkeeper.

377

: 00:17:34

Wendy Kidd: I have to say, even

though I've had many a bookkeeper,

378

: 00:17:36

'cause I've been in business

for over 20 years, I didn't know

379

: 00:17:39

these things until you told me.

380

: 00:17:41

And I was like, oh, that makes sense.

381

: 00:17:44

Kelsey Gleason: Well, I, I mean, I think

it's one of those things where finances

382

: 00:17:47

can sometimes intimidate and scare a

lot of people, and so Oh, absolutely.

383

: 00:17:50

Yes.

384

: 00:17:50

And so they don't want to be,

they don't know what to ask.

385

: 00:17:54

Mm-hmm.

386

: 00:17:55

Or, uh, they don't know

what to expect because.

387

: 00:17:58

There, there are no real, set standards

for bookkeepers or bookkeeping firms.

388

: 00:18:04

Yeah.

389

: 00:18:04

So, you know, you're really kind of

going in blind and unless you have, a

390

: 00:18:07

lot of prior experience where you can

pull on that bad experience and that bad

391

: 00:18:12

experience and that bad experience and

say, okay, I'm gonna ask all of these

392

: 00:18:15

questions of my next hire, so I know I

don't have that bad experience again.

393

: 00:18:18

It's almost like you're just

learning from experience instead

394

: 00:18:22

of just learning right up front.

395

: 00:18:24

Wendy Kidd: And if you haven't

had a good experience, you still

396

: 00:18:26

don't know the right questions.

397

: 00:18:27

That's true.

398

: 00:18:29

I'm just say it.

399

: 00:18:29

Just say it.

400

: 00:18:29

But um, you bring up a really

good point and that actually,

401

: 00:18:32

it gives me a good segue because

people do find this intimidating.

402

: 00:18:36

People don't like talking

about the financial numbers.

403

: 00:18:38

And it's so funny because.

404

: 00:18:40

In a nonprofit world, the number

one responsibility of a board

405

: 00:18:43

member is making sure that the

nonprofit is fiscally responsible.

406

: 00:18:47

Mm-hmm.

407

: 00:18:48

And I can't tell you how many

times board members have told me, I

408

: 00:18:51

don't know what this report means.

409

: 00:18:52

Mm-hmm.

410

: 00:18:53

I have no idea what I'm looking at.

411

: 00:18:54

I have no idea what I'm looking for.

412

: 00:18:56

Right.

413

: 00:18:56

What should I be doing?

414

: 00:18:57

And so how do you approach.

415

: 00:18:59

Teaching your clients, especially

the nonprofit boards about financial

416

: 00:19:03

reports in a way that makes the numbers

less intimidating and helps them

417

: 00:19:07

understand what they should be doing?

418

: 00:19:08

Kelsey Gleason: Sure.

419

: 00:19:09

Uh, a lot of it has to do with first

coming to them talking about what their

420

: 00:19:14

objectives and goals are, what information

do they want out of the report.

421

: 00:19:19

Then through our setup process or cleanup

process, restructuring that chart of

422

: 00:19:23

accounts, so it reflects those goals.

423

: 00:19:26

Wording everything in user friendly

language that is clearly identifying

424

: 00:19:31

whether we're working at the gala.

425

: 00:19:33

Are these gala's expenses, are these

an outreach initiative expenses?

426

: 00:19:36

And making sure that that's spelled out

in all of the reports so they can clearly

427

: 00:19:40

see, oh, hey, these donations came out

for this back to school outreach event.

428

: 00:19:44

These are the expenses we spent on that.

429

: 00:19:46

Uh, do those align?

430

: 00:19:48

Oh, I can see very clearly in the

reports that we still have $500

431

: 00:19:51

left of that specific donation,

that restricted donation, how are we

432

: 00:19:55

gonna utilize that moving forward?

433

: 00:19:58

Yeah.

434

: 00:19:58

Um, I, I think the more clearly you

structure the reports, the more user

435

: 00:20:03

friendly it makes them so that when

you have those, that first, second,

436

: 00:20:06

or third sit down with the board and

you go through what the structure

437

: 00:20:10

is now for the reports and you can

talk through, Hey, this is this.

438

: 00:20:14

This is that and drill down into

saying, okay, hat you've noticed this

439

: 00:20:19

shift in this particular category.

440

: 00:20:21

This is why we saw this increase in

gross wages s ignificantly this month.

441

: 00:20:26

A, we were running payroll weekly and

this month was a five week payroll run.

442

: 00:20:30

And then, or we had a significant

amount of overtime on staff and

443

: 00:20:33

that's why you see the jump there.

444

: 00:20:35

Yeah.

445

: 00:20:35

Making sure that you're talking to the

board through the numbers about anomalies,

446

: 00:20:40

or oddities that may jump out of them.

447

: 00:20:43

We like to specifically break

down items like the statement of

448

: 00:20:47

activity into monthly sections

so that they can see how the

449

: 00:20:51

organization's health has been monthly.

450

: 00:20:53

Yeah.

451

: 00:20:53

Um, and then that also helps to, drill

down about, you know, when an organization

452

: 00:20:59

has a specific event, whether it is

something like a gala or an, or an

453

: 00:21:02

outreach or driven or mission driven,

they can see how those expenses affected

454

: 00:21:07

the overall bottom line of the nonprofit.

455

: 00:21:10

Through the course of the year.

456

: 00:21:11

Wendy Kidd: Absolutely.

457

: 00:21:11

I, I a hundred percent.

458

: 00:21:14

Um, I think it's very important to

orient new board members so that

459

: 00:21:18

they understand what they're doing.

460

: 00:21:19

And something else to, to throw into that

is you want to make sure you go back to

461

: 00:21:24

your bookkeeper when something comes up,

such as we have this new grant and they,

462

: 00:21:29

they're going to expect X on the report.

463

: 00:21:31

Mm-hmm.

464

: 00:21:32

Can you help us figure

out how to report that?

465

: 00:21:34

Yes.

466

: 00:21:34

Um, so, you know, this is a, I think

this is a constant conversation.

467

: 00:21:38

I don't think this is a set

it and forget it situation.

468

: 00:21:41

So people need to remember they have

the, having a good relationship with

469

: 00:21:45

your bookkeeper is very important.

470

: 00:21:46

Absolutely.

471

: 00:21:47

And that comes back to communication.

472

: 00:21:49

And whoever is in touch with

the bookkeeper needs to know.

473

: 00:21:52

These are things that are

important to tell them.

474

: 00:21:54

Mm-hmm.

475

: 00:21:54

So you can't assume that,

you know, your ED knows.

476

: 00:21:57

Mm-hmm.

477

: 00:21:57

That they need to go back to the

bookkeeper and tell them, Hey, we have a

478

: 00:22:00

new grant and here's what's the report is.

479

: 00:22:02

And you can't assume that the board

member knew to do that either.

480

: 00:22:05

Right.

481

: 00:22:05

Or the treasurer knew to do that either.

482

: 00:22:06

So lots of communication there.

483

: 00:22:08

I know that you also gave me some really

fancy tips and tricks for QuickBooks,

484

: 00:22:13

so I really want you to share those.

485

: 00:22:15

What are the things that you like to have

them set up in QuickBooks that make it

486

: 00:22:18

easier to get the reports that they need?

487

: 00:22:20

Kelsey Gleason: So, there's plenty

of times where I'll take a look at,

488

: 00:22:22

uh, a set of books for, I mean, a

business or a nonprofit, and you've

489

: 00:22:26

got a chart of accounts that is a

hundred, 150, uh, categories long.

490

: 00:22:32

It's incredibly overwhelming.

491

: 00:22:34

It makes the reports

two, three pages long.

492

: 00:22:37

It, it just is not, um, it's

not a user friendly experience.

493

: 00:22:41

And a lot of times they do that because

they are really breaking down at a micro

494

: 00:22:46

level, the expenses associated with

this event or that event, or, uh, this

495

: 00:22:51

volunteer appreciation or this gala

moment, or this outreach or this mission.

496

: 00:22:56

And so something that is, you know,

supplies, which is really just a single

497

: 00:23:01

item gets broken down into five or

six other other categories, and it's

498

: 00:23:05

now really expanding that report.

499

: 00:23:07

Instead of doing that with QuickBooks,

you can actually use classes.

500

: 00:23:12

Yes, as long as you have the QuickBooks

Plus subscription, which you can get

501

: 00:23:15

discounted through TechSoup, you can

use classes and instead assign, uh,

502

: 00:23:20

assign classes to every, donation

to every expense, and then run your

503

: 00:23:26

statement of activity by classes,

and then it'll pull those events.

504

: 00:23:32

Outreach mission galas things out and

say, okay, these were all of the, this

505

: 00:23:36

was all the income assigned to the gala.

506

: 00:23:38

This, these were all the expenses

assigned to the gala, and here's

507

: 00:23:40

a report that breaks that down.

508

: 00:23:42

Yes, it

509

: 00:23:42

helps keep the overall report nice,

clean and simple, but still allows

510

: 00:23:47

you the detail that you may want in

order to analyze the success and the

511

: 00:23:51

viability of some of the programs

that the organization is initiating.

512

: 00:23:55

Wendy Kidd: Yeah, absolutely.

513

: 00:23:56

So people think about it.

514

: 00:23:57

Think about your gala.

515

: 00:23:58

Because we all have one.

516

: 00:24:00

We all have that moneymaker thing.

517

: 00:24:01

You want to track that.

518

: 00:24:02

You want to be able to see what

you can improve money-wise.

519

: 00:24:05

You've gotta be able to

use classes to do that.

520

: 00:24:07

If you are initiating a new program, a new

service that you're putting out, you need

521

: 00:24:11

to track what did it cost you to do that?

522

: 00:24:13

So make sure you have these

little, little classes.

523

: 00:24:16

They're just a little thing.

524

: 00:24:17

Mm-hmm.

525

: 00:24:17

But they make it so much easier,

so you don't have to go line

526

: 00:24:21

item by line item to figure out.

527

: 00:24:23

Is this working or not,

528

: 00:24:24

Kelsey Gleason: right?

529

: 00:24:24

Yeah.

530

: 00:24:25

And the other thing is projects.

531

: 00:24:27

Another feature of the QuickBooks

Plus subscription is the

532

: 00:24:30

capability to track projects.

533

: 00:24:31

When you have a restricted grant that

has specific requirements that have

534

: 00:24:36

to report, be reported on a regular

basis on how that money was spent.

535

: 00:24:39

Um, if you make that grant a project

in QuickBooks, you can run a statement

536

: 00:24:43

of activity solely for that grant.

537

: 00:24:47

There you go.

538

: 00:24:48

Just right off the bat, it's super quick.

539

: 00:24:50

You don't have to go through and dig

through all of the transactions from the

540

: 00:24:53

past year and try and figure it out, or

like some of those chart of accounts.

541

: 00:24:57

Track it in something that's,

you know, three pages long.

542

: 00:25:00

You can just track it as a

project, assign a project to every

543

: 00:25:05

expense that it's associated with.

544

: 00:25:07

Same thing with the donation,

and, and go from there.

545

: 00:25:11

Wendy Kidd: Okay?

546

: 00:25:11

All the grant writers are gonna

have a big sigh of relief.

547

: 00:25:14

If you do this, so whoever is writing

your grants, you need to tell them

548

: 00:25:18

that this is something you can do.

549

: 00:25:19

And then whoever is talking to

the bookkeeper, go tell them

550

: 00:25:22

that this is something we need

to do so that we can make.

551

: 00:25:25

These grants wonderful.

552

: 00:25:27

Right?

553

: 00:25:27

You know, all these applications

and all these reports that we

554

: 00:25:29

gotta turn in as nonprofits, this

is crucial for saving time people.

555

: 00:25:33

So do this

556

: 00:25:33

Kelsey Gleason: crucial for saving time.

557

: 00:25:34

Crucial for making sure you're

staying compliant, uh, and give that

558

: 00:25:38

grant paperwork to your bookkeeper.

559

: 00:25:40

Yes.

560

: 00:25:40

So they can review it.

561

: 00:25:41

Make sure they know exactly what's

allowed to be counted towards this grant.

562

: 00:25:44

That help they can, they can help you

stay compliant and make sure that those

563

: 00:25:48

transactions go against that grant report.

564

: 00:25:51

Wendy Kidd: Absolutely.

565

: 00:25:52

I love this.

566

: 00:25:53

These are things that I think don't

get talked about enough, and it's just.

567

: 00:25:57

Day-to-day operations, that makes

it so much easier for everyone.

568

: 00:26:00

Kelsey Gleason: Yeah, and it's, and it's

definitely one of those things as someone,

569

: 00:26:03

if you're a smaller organization, that

again, doesn't necessitate outsourcing,

570

: 00:26:07

make sure that you're giving the person

who's doing the work, the support

571

: 00:26:11

they need to utilize these tools.

572

: 00:26:12

If you're paying for the software, use

the tools that it possesses to help

573

: 00:26:16

make your life, the board's life, the

volunteer's life, So much easier.

574

: 00:26:21

Wendy Kidd: Again, invest

in training for people.

575

: 00:26:23

Yeah.

576

: 00:26:23

Don't just send them to YouTube.

577

: 00:26:24

Don't just send them to Google.

578

: 00:26:26

Come on people.

579

: 00:26:26

I'm looking at you.

580

: 00:26:27

I'm looking at you.

581

: 00:26:28

Make sure that you are giving

them the support they need

582

: 00:26:30

by getting them training.

583

: 00:26:31

Yeah, for sure.

584

: 00:26:33

All right, so I'm gonna ask you one

last question because I think this

585

: 00:26:36

is one that everybody wants to hear.

586

: 00:26:38

Who, for people who aren't numbers

people, the nonprofit leaders that just

587

: 00:26:41

don't, their numbers are not their gig.

588

: 00:26:43

'cause I can't tell you how

many of 'em, they tell me that.

589

: 00:26:46

What's one report or metric

you think that they should

590

: 00:26:48

absolutely understand and monitor?

591

: 00:26:50

Kelsey Gleason: So overhead expenses

yes, are almost always a, a relatively

592

: 00:26:56

fixed expense for most operations.

593

: 00:26:59

You want to know what that

bottom line number is?

594

: 00:27:02

To keep the doors open on a monthly basis?

595

: 00:27:04

Yes.

596

: 00:27:05

Otherwise, how can you accurately

project how valuable those donations are?

597

: 00:27:10

Yeah.

598

: 00:27:11

You should know what your rent

costs, what your insurance costs,

599

: 00:27:14

what your bookkeeper costs.

600

: 00:27:17

You should have all of those, uh,

itemized and clear so that you know,

601

: 00:27:22

okay, if we don't bring in at least

$10,000 in donations this month.

602

: 00:27:27

We are operating the

red at the very least.

603

: 00:27:30

Yes, yes.

604

: 00:27:30

Um, so I, I think that's a, a

clear starting metric that's a

605

: 00:27:34

great place for, any organization

or any business to start with.

606

: 00:27:37

Absolutely.

607

: 00:27:38

Wendy Kidd: It's, it's so crucial

for so many things because number

608

: 00:27:40

one, it's the thing that they

least are likely to fundraise for.

609

: 00:27:43

Mm-hmm.

610

: 00:27:43

Because so many grants don't want

to pay for overhead expenses,

611

: 00:27:47

which don't even get me started,

that's a whole nother podcast.

612

: 00:27:49

But I think that it's also the

easiest trackable, and the easiest

613

: 00:27:54

red flag that you will see in your

P&L reports because it's gonna be

614

: 00:27:58

the first thing that gets changed

that they don't think you're gonna.

615

: 00:28:02

Right, right.

616

: 00:28:03

So if you don't have an explanation

for whoever made that change, this

617

: 00:28:07

is your easy way to catch, Hey,

why did our rent go up by $200?

618

: 00:28:11

Why did our payroll double last month?

619

: 00:28:14

Right.

620

: 00:28:14

Did we bring in some contractors

and we weren't aware of it?

621

: 00:28:17

Did we go over like, what happened?

622

: 00:28:20

You know, did I start a new

project and it required way more

623

: 00:28:23

time than we ever thought it did.

624

: 00:28:24

Do we need to streamline something?

625

: 00:28:25

Is there a digital tool that could

make that easier and faster for

626

: 00:28:28

us so we can pay $50 a month for

that tool versus $300 in labor?

627

: 00:28:33

You know?

628

: 00:28:33

Right.

629

: 00:28:34

Like operating expenses are huge and

they just get overlooked so easily.

630

: 00:28:39

Kelsey Gleason: They, they do.

631

: 00:28:40

I I, I had a, a, a case one time

where we found that there was.

632

: 00:28:44

That, uh, the organization had

been paying for a storage unit Yes.

633

: 00:28:48

From many years back, but the

board had changed so much.

634

: 00:28:52

Nobody had considered it.

635

: 00:28:53

So when we went through and drilled

through overhead expenses and we

636

: 00:28:57

saw it, we're like, what is this?

637

: 00:28:58

I was like, I, I mean, I don't know.

638

: 00:29:00

It's been the same expense for

the last, you know, five years.

639

: 00:29:03

Wendy Kidd: They forgot

about their storage unit.

640

: 00:29:05

Kelsey Gleason: They did.

641

: 00:29:06

Wendy Kidd: Oh, poor babies.

642

: 00:29:07

Kelsey Gleason: But it, it was an expense

they were paying for from an overhead

643

: 00:29:09

perspective that they didn't need.

644

: 00:29:11

Yeah,

645

: 00:29:11

yeah.

646

: 00:29:11

Now they were able to

resolve it, which is great.

647

: 00:29:13

But, making sure you do that

health check every once in a while

648

: 00:29:16

on what those overhead expenses.

649

: 00:29:18

Uh, are, especially as you

have changes within the board,

650

: 00:29:21

Wendy Kidd: if nothing else, do it

once a year when you do your budget.

651

: 00:29:24

Yes.

652

: 00:29:24

It's part of your budgeting process

to look at your operating expenses and

653

: 00:29:28

see if you can change them in any way.

654

: 00:29:29

Kelsey Gleason: Yes.

655

: 00:29:30

Wendy Kidd: So, you know, and I, not

to say that you should absolutely

656

: 00:29:33

go with the cheapest of whatever

the thing is, I'm not a fan of that.

657

: 00:29:36

I believe in paying for

what things are worth.

658

: 00:29:38

Right.

659

: 00:29:39

But as a nonprofit, we all know

that price tends to drive us a lot.

660

: 00:29:43

Yes.

661

: 00:29:43

But look at that, those overhead

expenses at least once a year, if

662

: 00:29:47

not more, but keep an eye out open.

663

: 00:29:51

Keep an ear open for things that can

help with those operating expenses

664

: 00:29:55

and make sure you're communicating

to your board members, right, and

665

: 00:29:58

you're telling them, I'm gonna save

you money here, or I think we need to

666

: 00:30:00

spend an extra $20 here or whatever.

667

: 00:30:02

'cause we all know that you're

trying to get your budget approved

668

: 00:30:05

once a year so you don't have to

go back for each little thing.

669

: 00:30:07

Mm-hmm.

670

: 00:30:08

But at least do it once a

year when you do that budget.

671

: 00:30:10

Yes.

672

: 00:30:11

So, yeah.

673

: 00:30:12

All right.

674

: 00:30:12

Was there anything else that

you would like to cover today?

675

: 00:30:14

I, I think we hit all the

things we talked about.

676

: 00:30:17

We did.

677

: 00:30:18

Yeah.

678

: 00:30:18

Okay, cool.

679

: 00:30:19

Well, this was fabulous.

680

: 00:30:21

I hope everyone gets as much

out of this as I did at least

681

: 00:30:24

learn how to hire a bookkeeper.

682

: 00:30:26

This is clearly, I did not, I

knew people were good for certain

683

: 00:30:29

reasons, but I didn't know all

the reasons I should be looking.

684

: 00:30:32

So thank you so much for

being here with us, Kelsey.

685

: 00:30:33

Kelsey Gleason: Of course.

686

: 00:30:34

Thank you so much for having me on.

687

: 00:30:35

It was such a pleasure

speaking with you today.

688

: 00:30:36

Wendy Kidd: Absolutely.

689

: 00:30:37

All right, guys.

690

: 00:30:38

Thanks so much.

691

: 00:30:38

We'll see you next time.

692

: 00:30:41

Thanks for listening

to The NonProfit Nook.

693

: 00:30:43

We're building better nonprofits together.

694

: 00:30:46

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695

: 00:30:49

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696

: 00:30:53

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697

: 00:30:56

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698

: 00:30:59

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699

: 00:31:02

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700

: 00:31:06

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701

: 00:31:08

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